Friday, December 09, 2016

Google Makes So Much Money, It Never Had to Worry About Financial Discipline - Bloomberg

From a profile of Alphabet amid organizational transition

"The architect of this reorganization—known as “Alphabetization” at the ever-sunny Google—was Ruth Porat, the new chief financial officer. Porat, who was born in England but grew up in Palo Alto, led Morgan Stanley’s technology banking division during the first dot-com boom, served as an adviser to the Treasury Department during the bailouts of Fannie Mae and Freddie Mac, and became Morgan Stanley’s CFO in 2010. She joined Google in May 2015 with a mandate to bring discipline and focus to a company so awash in cash that it never needed much of either. She instituted rigorous budgeting and, according to people familiar with Alphabet’s operations, forced the Other Bets to begin paying for the shared Google services they used. Projects hatched with ambiguous timelines of 10 or more years in some cases had to show a path to profit in half the time.

At most big companies, such financial controls are standard operating procedure, and Alphabet’s investors are pleased. Its stock is up 35 percent since Porat joined. But within the Other Bets, Porat’s tenure has been controversial, earning her an unflattering nickname: Ruthless Ruth. “She’s a hatchet man,” says a former senior Alphabet executive. “If Larry isn’t excited about something,” the executive continues, referring to CEO Page, “Ruth kills it.”"